Monday, August 18, 2014

Doug Casey - Is Silver Shinier Than Gold?

Is Silver shinier than Gold?
Richard Knowles - Government bank 'bail-ins' in Canada?

Saturday, August 16, 2014

Junk Bond Funds Just Experienced A 6-Sigma Event

Junk Bond Funds Just Experienced A 6-Sigma Event

High-yield bond mutual funds saw Outflows Total An Eye-Popping $7.1 Billion last week.

"HY flowmageddon," said Goldman Sachs' Charles Himmelberg in a research note we saw via @Lebullmarche. "This is the largest HY outflow on record – a 6-sigma event when flows are scaled by mutual fund assets under management!"

Sigma is another way of saying standard deviation. And the greater the number of standard deviations, the more unlikely the event.

A 6-sigma event is extremely rare. If you want to put a number to it, think 1 in 500 million. According to Business Insider quant reporter Andy Kiersz, it's like flipping a coin 29 times in a row and getting heads each time. It's like rolling a die 11 times in a row and getting 6 each time.

"High-yield is less overvalued," Said Doubleline Funds' Jeffrey Gundlach in a phone call with Business Insider on Friday.

Gundlach stopped short of saying high-yield looked attractive. Himmelberg didn't.

"Our confidence in the buying opportunity in the face of retail selling stems from our belief that credit fundamentals remain supportive, while valuations are now more attractive," Himmelberg said. "Unlike the muni market (where institutional liquidity providers are few), the corporate market has a deep bench of investors who are responsive to value. This is one reason we have long argued that dislocations caused by retail selling present more opportunity than risk."

"[T]he U.S. high yield house is not burning down," said UBS's Matthew Mish. "The real panic will come with a more severe downturn in credit and economic fundamentals, which will likely trigger an exodus from non-institutional and crossover/tourists from U.S. high yield. That moment is unlikely to be a 2014 event."

This is not to say the outflows and price declines will end anytime soon.

"Given the outstanding concerns around rate, credit, and liquidity risks, some will simply choose to exit early – the tack some investors are clearly embracing," Mish said. "How far it extends is anyone's guess, but the run continues and the negative headlines seem unlikely to abate over the near term." Read »

Thursday, August 14, 2014


Chinese silver inventories are growing increasingly tight as stocks at the SFE continue to fall to record low levels.

After the PAPER SMASH in the price of silver in April 2013, we can see just how fast inventories declined. 

By August, 2013, silver inventories at the Shanghai Futures Exchange fell 610 mt to 533… a staggering 53% decline. Inventories continued to fall, but a slower pace until they reached a low in November at 418 mt.

Then over the next three months, there was a build of silver stocks to a high of 575 mt in February, 2014.

Once the price of silver started correcting lower, inventories declined in March to 417 mt, and then a huge fall to 246 mt by the end of April. In May and June, silver inventories remained relatively flat as spot price bottomed then headed higher in June.

When June rolled into July 2014, once gain, the price of silver headed lower right along with the decline in silver warehouse stocks.. Another 86 mt were withdrawn in July as inventories are now the lowest level (148 mt) they have ever been.

In a nutshell, silver inventories declined nearly 90% from their record peak set in March, 2013. 

The Shanghai Futures Exchanged experienced a net decline of 995 mt from March, 2013 to the end of July this year

Tuesday, August 12, 2014

Argentinian Bitcoin Exchange Loses its Bank Accounts

Argentina-based bitcoin exchange Unisend stopped customer deposits and bank transfers on Monday after Banco Santander Río and Banco Gailicia suddenly closed its company accounts.

Santander and Gailicia sent Unisend written notification on 28th and 31st July, respectively. Each cited Article 792 of Argentina’s code of commerce, which says that a banking relationship can be terminated at the request of a bank or its client provided 10 days notice is given.

Unisend partner José Rodriguez told CoinDesk that the exchange does not expect its services to be affected in the long term, stating:

“We have other banking relations and are working to open new ones in case any other contingency arises. Operations are continuing as usual.”

About 90% of users transfer money to Unisend from their bank accounts. The other 10% deposit cash through payment processors like RapiPago ARS, PagoFacil,CobroExpress and BaproPagos, among others.

For the time being, customers can still use their bank accounts to transact with the exchange as the Unisend accounts aren’t set to close until later this week. The company aims to have its other accounts ready for user trading before then.

- Source, CoinDesk

Sunday, August 10, 2014

Costs? US Exports To Russia Collapse 34%

While Jack lew promised the economic impact on the US economy of Russian sanctions would be minimal, the facts suggest the opposite. Admittedly, Russia is not the US' largest trade partner but escalating sanctions have resulted in a 34% collapse in US exports to Russia - the largest absolute drop since 2010. Imports (from Russia) also fell (for the 3rd month in a row) but while the US is suffering 'costs' it is clear Russia is hurting more (for now - as Putin is set to unleash his countermeasures). Since sanctions began Russian stocks are up 9.5% and the S&P up 4.5% but the spread has collapsed in recent weeks.


Costs? 3rd time the charm?

-  Source, Zero Hedge

Wednesday, August 6, 2014

Dollar Dumps, Gold Jumps As Trannies Tumble Most In 6 Months

Stocks dumped (EU weakness)-and-pumped today with the majors ending marginally higher (except the Trannies down 7 of last 9 days). The Dow Transports are down over 6% from record highs - the worst slide since Feb 2014. The Russell is down over 7.5% from its peak (and the rest of the majors are playing catch-down from that turning point). The S&P bounced perfectly off its 100-day moving-average. Gold and silver jumped notably higher (gold +1% on the week) after more invasion headlines early on. Oil slipped. Treasury yields mimicked stocks, falling early to 13 month low yields and rising (selling TSYs) after Europe closed to end modestly lower ion yields on the day. The headlines though were focused on the plunge in the US Dollar (driven by a surge of JPY buying around lunchtime). Credit markets tracked stocks moestly but we note one pulled high-yield deal today (unusual). When AUDJPY quit on stocks, VIX took over, rammed back under 15.8 to ignite stocks but pushed higher after Europe closed.

- Source, Zero Hedge, read more here: